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Government spokesperson, Alaa al-Hadidy, on Wednesday said Egypt is far from the “frightening scenario” of bankruptcy.

“Bankruptcy is normally preceded by banks closing down and failure to repay debts,” he said. “This is not happening.”

“We suffer a budget deficit and a lack of revenues,” he added. “But not to the point of bankruptcy.”

He also said that downgrading Egypt is an adverse step, but that it does not affect the economy or negotiations with the International Monetary Fund.

Hadidy cited the trade minister as saying wheat reserves can last four months, sugar 37 days and cooking oil until mid-February.

Economist and former deputy prime minister, Hazem al-Beblawy, had told Al-Masry Al-Youm on Tuesday that Egypt is on the brink of a deep economic crisis that may lead to bankruptcy, and that foreign and domestic credit ratings of Egypt raise fears in the West and leading to low investor confidence.

“Standard & Poor's downgraded Egypt from level B to B- in its credit rating report,” he said. “This will make the pound fall against other currencies.”

The agency cut Egypt's long-term credit rating on Monday and said another cut was possible if political turbulence worsened, undermining the government’s ability to follow through on difficult but necessary economic decisions.

“The negative outlook reflects our view that a further downgrade is possible if a significant worsening of the domestic political situation results in a sharp deterioration of economic indicators such as foreign exchange reserves or the government's deficit,” S&P said.